Japan – a new, emerging FDI destination

Foreign direct investment (FDI) in Japan has been increasing since 2011, with inward FDI stock hitting a record high in 2020. What has triggered this positive development? Japan is transforming – the world’s third largest economy is actively opening its doors to foreign business. It is creating the best possible environment for overseas investors. Let’s take a closer look at the benefits foreign businesses may enjoy in Japan, a new and emerging FDI destination.

Greater market potential and innovation opportunities

Japan, with its world-leading R&D capabilities and technologies, offers foreign investors path-breaking opportunities fueled by the growth and distribution strategies of the government to realize a new form of capitalism.
Through regulatory innovation, the Government of Japan is providing foreign investors with a global test bed to facilitate the experimentation, development and success of emerging technologies.
Government initiatives have helped to create a startup ecosystem throughout Japan including the countryside. Across the nation, a number of new businesses are emerging from universities, and there is a growing momentum of open innovation in large Japanese companies which is contributing to a rapid technological evolution.
Japan is driving digital transformation both in the private and public sectors to enable greater productivity. Founded in 2021, the Digital Agency is spearheading the creation of opportunities in global growth sector such as cloud-based infrastructure and software, cybersecurity, machine learning and deep learning.
Japan has pledged to achieve net-zero emissions by 2050 and has set out an ambitious plan to become the global leader in decarbonization. Japan welcomes companies and technologies from around the world to accelerate the innovation and creation of new solutions to tackle the global issue of climate change.
Japan, recognized for its world-leading R&D capabilities with quality IP assets, is providing foreign businesses with new value creation opportunities.

Quality business environment and globally competitive regulations

Japan’s free and fair, rule-based market is creating a productive and promising business environment for foreign investors. Japan is improving transparency in both business practices and administrative procedures. Japan’s quality business environment and globally harmonized rule of law offers low risk and higher value-added opportunities to foreign investors.
By streamlining administrative procedures to ensure greater efficiency, the government is making it even easier to start businesses quickly and conveniently in Japan.
Japan’s international investment agreements promote mutually beneficial investments. Japan’s initiatives to strengthen global economic ties through FTAs and EPAs not only ensure that those operating in this market enjoy global access, but also help facilitate investments between partner countries.
Japan’s corporate governance reforms promote improved dialogue, more sustainable corporate growth, and increased corporate value for investors.
Foreign professionals in Japan not only enjoy staying in one of the best countries to live in, but also benefit from a pro-global business environment featuring lower corporate tax and easier visa procedures.
Foreign businesses in Japan are protected by a fair and globally harmonized legal and regulatory system which covers business areas including IP and data governance.